As mentioned in our prior News & Events Alerts, during this past Summer, the NYS Governor, Andrew Cuomo, unveiled, START-UP, a new job creation program.
The START-UP NY Program will create statewide tax-free zones in order to provide major incentives for businesses to relocate, start up or expand in New York State. Businesses will have the opportunity to operate state and local tax-free for ten years on or near academic campuses, and their employees will pay no state or local personal income taxes.
Employees pay no state income taxes on their wages for the first five years on income up to $200,000 of wages for individuals, $250,000 for a head of household, and $300,000 for taxpayers filing a joint return. In addition, businesses may qualify for additional incentives.
What businesses are eligible for START-UP NY?
Many different types of businesses are eligible to apply to the program. In order to participate, businesses need to support the academic mission of the college or university. Every business must create new jobs in order to participate by:
- Being a new start-up company;
- Being a company from out-of-state relocating to New York State; or
- Expanding as an existing New York State company.
In New York City, Long Island and Westchester County, businesses must be start-ups or high-tech companies. Certain types of businesses are excluded from the program, including retail and wholesale businesses; restaurants and hospitality; professional practices like law firms and medical practices; and energy production and distribution companies.
How many jobs must a business create to be eligible for START-UP NY?
There is no minimum requirement for the number of net new jobs that must be created, but all participating businesses must create jobs to receive the program's benefits.
What tax benefits will participating companies receive?
START-UP NY will provide new and expanding businesses that create new jobs the opportunity to operate completely tax-free including no income tax for employees and no sales, property or business tax while partnering with higher education institutions. Business and employee tax benefits will be available for up to ten years. (After five years, certain NYS high-earners will be limited on the amount of employee earnings exempted from the Personal Income Tax).
Click here for more information regarding the initiative.
If you have any questions related to the above article or the links, contact your Marcum Tax Professional.